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When the stock market recovers for a day, do consumers and businesses also turn on a dime? I'm David Brancaccio in Los Angeles. It's like when the screen goes wavy, the character wakes up, and it was all a bad dream.
Perhaps the stock market mess many connect to President Trump's intense tariff policy is, as of this morning, corrected in a way. After the U.S. and China rolled back some mutual import taxes yesterday, the Nasdaq index is now up 22 percent from its early April trough. Pros now label the Nasdaq as a bull market. Ben Kumar, head of equity strategy at Seven Investment Management, takes a detached view.
It has been quite impressive to watch the way in which people have priced and repriced basically the Twitter feed
of one man, because how can something be worth 20% more than it was a month ago? Were you wrong last month or are you wrong today? Wow. We're having an existential crisis here, you and I, Ben. But I will say it's not just big famous companies like Apple and Netflix, quite broad based this rally that occurred after tariffs flipped some with China yesterday. Absolutely. And I think you've seen it in what I think of as kind of the
The Trump trades round one, you know, it's banks, it's small caps, it's all of the sectors that did well in that first 2016-2017 rally. We also have some financial services companies that like to make predictions, lowering some risk of recession now with the partial turnabout involving China.
I think, I'm not sure, big bulge bracket banks putting out recession updates every other day is necessarily helping their reputation as all-seeing and all-knowing. If you'd have said at the start of April, things might be a bit more uncertain from here, we'll wait and see, that would probably have served you best.
Always good to catch up with Ben Kumar, head of equity strategy at Seven Investment Management out of London. Ben, thank you. Thank you. The Russell 2000 stock index, where many smaller companies live, is up 19% from a low after the big tariffs were announced. NASDAQ and S&P futures are down this morning a bit, in both cases three-tenths percent.
The key tax and spending committee in the House of Representatives is set to take up the sweeping tax bill pushed by the Republican majority. It will affect every woman, man, child and probably pet in America. And in its present form, as of this morning, it extends many tax cuts from President Trump's first term. But there are many twists expected ahead. Marketplace's Nancy Marshall-Genzer has that.
The new tax measure would make the 2017 tax cuts permanent. It would not increase taxes on the very wealthy, although President Trump showed some support for that. The bill does try to fulfill some of his campaign promises, with temporary tax breaks for tips and overtime and a temporary deduction for interest on a car loan. Seniors would still pay taxes on Social Security, but they would receive an extra $4,000 deduction.
The tax bill would raise the cap on deductions of state and local taxes from $10,000 to $30,000. That's still not likely to satisfy Republicans from high-tax states. The House Ways and Means Committee will debate changes to the bill this afternoon. Republicans hope to have the entire House approve the legislation by Memorial Day. I'm Nancy Marshall-Genzer for Marketplace.
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President Trump is now in Riyadh, Saudi Arabia. It's the first stop on a four-day trip to the Gulf with Qatar and the United Arab Emirates also on the itinerary. Among the goals, solidifying business deals with some of the world's richest countries. Samir Hashmi is Middle East business correspondent for our editorial partners at the BBC. He spoke from Riyadh with my colleague, Sabri Beneshour.
So this is a little less of a geopolitical visit and more about investment deals. How significant would you say this trip is? It's quite significant if you look at the context of this visit, because this is President Trump's first major foreign trips since he's returned to office. Now, it's about investment deals, as you said. In January, Saudi Arabia announced that they would be investing $600 billion in the U.S. economy over the next four years. President Trump wants more.
In addition to that, in March, the United Arab Emirates announced that they would be investing $1.4 trillion over the next 10 years. What kinds of investments, what industries are we talking about here? So military defense deals will be on top of the economic agenda. I mean, there are reports that President Trump will offer the Saudis a deal which would be close to or over $100 billion.
Interestingly, even during his first trip, President Trump had offered a deal, a defense deal of over $100 billion to the Saudis. But only $20 billion could go through because in 2018, after the murder of the Saudi journalist Jamal Khashoggi, a lot of these deals came under scrutiny in the Congress. And then in 2021, there was a ban that was lifted two years ago.
But that hasn't seen much progress. So I think one of the things that the Saudis are also looking for is that apart from signing these deals, they want an assurance from President Trump that this time these deals would go through.
And the second would be AI. During the Biden administration, they had placed restrictions on the export of critical AI chips. Now, these are countries, the UAE and Saudi Arabia, they're investing billions of dollars in different sectors because they're trying to diversify their economy away from oil. So what they're hoping is that President Trump will relax some of those restrictions and
and announce some sort of a deal which would give them easy access to those semiconductors and AI chips. Ultimately, you know, besides immediate investments in sales here and there, what are President Trump and the Gulf states looking to get out of this trip big picture? For President Trump, it's very clear. He wants these big investment deals because this would be a win for President Trump because he can indicate back home that is America first in
agenda is working. For the Saudis and other Gulf states, they are looking at really reviving and strengthening ties with the United States because during the Biden administration, ties between Saudi Arabia and the United States had frayed. So they're really looking to revive those. And also Saudis are looking for investments from American firms.
Reporters Samir Hashmi and Riyad there. There's also news that China will get back to allowing Boeing to deliver new airplanes, part of this new thaw in U.S.-China trade relations. In Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report from APM, American Public Media.
Can we invest our way out of the climate crisis? Five years ago, it seemed like Wall Street was working on it until a backlash upended everything. So there's a lot of alignment between the dark money right and the oil industry on this effort. I'm Amy Scott, host of How We Survive, a podcast from Marketplace. In this season, we investigate the rise, fall, and reincarnation of climate-conscious investing.
Listen to How We Survive wherever you get your podcasts.